Payers, Orgs React to Coverage Implications of Build Back Better

Updated 11/22/21: This article has been updated to include a statement from AHIP.

Payers and stakeholder organizations have had mixed reactions to the Build Back Better Act, which passed in the House on November 19, 2021 by seven votes. 

The bill addressed a wide variety of economic factors, including housing, child care, and paid leave, President Joe Biden shared in a statement. Among these proposals, the Biden administration also sought to lower prescription drug costs and extend enhanced Affordable Care Act tax credits.

The Blue Cross Blue Shield Association (BCBSA) expressed its pleasure at the passing of the Build Back Better Act, particularly pointing out the role that the bill’s Affordable Care Act tax credits might play if extended.

“The extension of enhanced Affordable Care Act tax credits will save individuals and families thousands of dollars each year on their health care premiums, and it will help millions of people living in states that have not expanded Medicaid,” the BCBSA statement explained.

“As the package is finalized, it is important for Congress to protect the more than 27 million people covered by the Medicare Advantage program by upholding its current benefits and structure. We will continue to work closely with Congress on items of critical importance to the American people including prescription drug reform, improving health equity, and ensuring long-term fiscal sustainability.”  

AHIP indicated that it would continue to work with policymakers to ensure that the bill was in the best interests of the consumer.

“Every American deserves access to high-quality, affordable coverage and care. That’s what health insurance providers are committed to delivering whether people rely on the individual market, receive coverage through their employer, are enrolled in Medicaid, or are covered under Medicare," David Allen, an AHIP spokesperson, told HealthPayerIntelligence in an emailed statement.

"We support advancing solutions that expand coverage and deliver more affordable health care choices to more Americans, but will raise significant concerns and oppose any proposals that would increase premiums or lead to reduced benefits.  We will remain actively engaged with policymakers throughout this process to deliver constructive solutions that work for every patient and consumer.”

The American Benefits Council (the Council), on the other hand, had both positive and negative responses to various facets of the bill.

With regard to the healthcare portions specifically, the organization expressed concerns related to the bill’s stance on prescription drug pricing and its implications for employers. The Council noted that the law failed to offer commercial payers negotiated drug prices or inflation rebates.

“As the largest purchaser of prescription drugs in the United States, employers are deeply concerned about prescription drug costs and the Council supports comprehensive prescription drug pricing reform. But we remain concerned about proposals that would shift costs to employers and people buying coverage in the individual market,” said James A. Klein, president of the American Benefits Council.

Furthermore, the Council was dissatisfied with the provisions regarding mental healthcare. Among other labor law penalties, the Build Back Better Act would allow the government to penalize employers for not complying with mental health parity laws. The Council called on the Department of Labor to provide clearer guidance on parity reporting, instead of penalizing employers.

However, the American Benefits Council had a more positive response to the way in which rebates might apply downward pressure on drug price growth.

“The prices employers pay will be included in calculating rebates to the Medicare program. This should help mitigate future price growth on existing drugs for employers and employees,” the Council wrote.

The American Hospital Association (AHA) also shared its criticisms of the bill. The organization expressed support for the bill’s efforts in regards to community healthcare, such as expanding Affordable Care Act subsidies and investments in maternal and childhood healthcare.

“However, while we appreciate the goal of increasing coverage to residents in states that did not expand their Medicaid programs, it should not come at the expense of vital funding to hospitals and health systems located in those parts of the country that serve a large number of children, the poor, the disabled and the elderly,” AHA stated.

“These cuts are unacceptable, especially while hospitals remain on the front lines of fighting COVID-19 and the deadly Delta variant.”

Apart from coverage expansion, the law introduces five ways to lower Medicare Part D drug spending. These include allowing the government to negotiate drug prices, requiring a drug manufacturer rebate that surpasses the inflation rate, limiting cost-sharing for all Part D drug plans, and repealing the drug rebate rule. 

Separate studies have evaluated the impact of extending Affordable Care Act premium tax credits. Such a move might be able to fix the “family glitch” without severely impacting employer-sponsored health plan coverage.

Having passed in the House, the bill will now move on to the Senate, where experts anticipate it will be met with opposition.